Cheer for battered shares

Cautious optimism in New York as traders hope for the best.

Stock markets across the world bounced back from almost two weeks of steep falls in share prices on Friday.

Traders were happy in Germany and other European markets.

But they remain at low levels and many financial experts are still nervous about the future.

Last week, dealers panicked when the benchmark US stock index, the Dow Jones Industrial Average, fell below 10,000.

This week they cheered when it bounced back to close at 9,509 points, still below last Friday's close.

But the technology heavy Nasdaq index climbed to close at 1,928 points.

That is an improvement on last Friday's close of 1,891, but still below the psychologically crucial 2,000 level.

Technology and bargains

Much of Friday's rally from low levels came as battered technology stocks clawed back some of their losses, and as bargain hunting investors were snapping up stocks that seemed cheap.

US markets close

US Dow:
9,509.59
up 1.2%

US Nasdaq:
1,928
up 1.6%

A rise in share prices in the US was preceded by gains in Europe, which again came following gains in Japan.

However, not all stock markets rose on Friday.

Some Asian markets saw share prices fall, with both Australia and Hong Kong slipping, losing 43 and 38 points respectively.

New York markets

The Dow Jones index, which includes America's 30 biggest companies, was up 120.11 points at 9,509.59 points.

A 360 points rise caused cheer in Japan.

New York's Nasdaq index continued to build on Thursday's gains, and was up 30.95 at 1,928, but still about 60% below its record closing high.

The broader Standard & Poor's 500 index gained 22 points to 1,139 points.

But traders remained nervous.

"People are hoping the worst is behind us, and perhaps we have reached a bottom. I don't know if that's true or not," said Unity Management's Guy Truicko.

"Let's not mistake this for a beginning of a bull market move," said Avatar Associates' Charles White.

Gains in Europe

European shares staged a comeback from the previous day's trading which saw the biggest fall in London's FTSE 100 index of leading shares since 1992.

The FTSE closed up 87.5 points at 5,402 points, a 1.65% rise.

"The bounce is a nice way to end what's been an abysmal week," said ABN Amro's UK equity strategist, Gareth Williams.

European markets, Friday close

London's FTSE 100:
5,402
Up 1.65%

Paris Cac-40:
4,951
Up 2.6%

Frankfurt Dax:
5,544
Up 2.9%

Markets were also higher in Paris, where the benchmark Cac 40 closed up 1.6% at 4,951 points, and Frankfurt, where the Dax clawed back 2.9%, at 5,544 points.

The Dow, which until last week had been resilient to the massive selloffs that devastated the technology heavy Nasdaq index, has plummeted in the past few days because investors believe the US economy is getting much weaker.

There has been plenty of evidence this week that blue chip companies have suffered from a slowing economy.

Procter & Gamble announced Thursday it was slashing 9,600 jobs to restore long-term growth.

General Motors, which mothballed two assembly plants this week, said it will temporarily halt operations at more plants.

Early on Friday, P&G fell $1.96 to $60.79, and General Motors fell 80 cents to $51.50.

By contrast, technology stocks gave the Dow a boost on Friday, with Microsoft climbing $1.19 to $55.19, and IBM soaring $3.10 to $92.20.

Pausing for breath

Friday's gains were the first signs that the global share crash might be pausing for breath.

Hong Kong and other Asian markets ended the day lower.

It ends an extraordinary week of losses on the world's stock markets, which has wiped billions from the value of the world's top companies.

The Dow closed at a two year low on Thursday, close to bear market territory.

Share prices in Tokyo ended Friday up 8% over the previous week's close following four hectic days' trading in which the market alternated between plunge and climb.

Market gainers

Telewest
up 12%

Colt Telecom
up 7.2%

Energis
up 7.3%

Marconi
up 6.8%

France Telecom
up 5.2%

Deutsche Telecom
up 3.2%

(Late Friday)

The Tokyo Stock Exchange's Nikkei-225 average closed up 360.57 points on Friday at 13,214.54, reversing the previous day's 249.97-point decline.

London's FTSE 100 index of leading UK stocks plunged on Thursday to close down 225.9 points at 5,314.

It remains about 25% lower than the peak it reached on 31 December 1999.

The last time the market experienced a one-day fall of this size was when the pound crashed out of the European exchange-rate mechanism almost a decade ago.

Fifteen months ago, the FTSE 100 index hit an all time high of 6,930 points.

Since then the internet bubble has burst, and technology and telecoms stocks have come tumbling dramatically down.

Drops have been especially steep over the last two weeks, fuelled by fears of global economic slowdown in the US and its effect on the European markets.